Some Relief Coming for Loss of Medicaid Sales Tax Revenue

According to federal regulation, as of July 1, 2017, Ohio can no longer charge sales tax on Medicaid services.  The elimination of this tax is going to have a huge impact on the sales tax revenue base of counties and transit authorities in Ohio, as this sales tax made up 7.5% of annual county sales tax collections, on average.  However, the recently signed state budget includes some relief for counties and transit authorities.

The State of Ohio Budget includes an additional appropriation measure to establish a “Medicaid Local Sales Tax Transition Fund” and to appropriate $207 million for the purpose of mitigating the effects of the elimination of sales taxes on Medicaid transactions.  The amount provided to each county and transit authority  is calculated based on 2015 and 2016 sales tax collections (find the actual amount per entity in the chart below).

There is no specific appropriation for future years; however, there will be a calculation performed annually to determine the continuing impact of this lost revenue, and there is a potential for continued payments that will phase out over a number of years.

Steps for Counties and Transit Authorities to take:

  1. On or before October 15, 2017, each county and transit authority that levies sales taxes must establish a “County and Transit Authority Medicaid Sales Tax Transition Fund.”
  2. After establishing this fund, the county or transit authority’s board must pass a resolution to identify when and how much money can be transferred out of the fund and where the money may be transferred. There is no restriction from the state on the transfer of this money, so it may make the most sense to transfer these proceeds immediately to a fund of the county or transit authority that normally receives sales tax revenue.
  3. Payments from the State of Ohio will be distributed on or before November 1, 2017 and between January 1, 2018 and February 1, 2018. Counties and transit authorities must deposit these payments into the County and Transit Authority Medicaid Sales Tax Transition Fund.

Clark Schaefer Hackett will be working with its county and transit authority clients to assist them with appropriately recording and reporting this revenue, but we’re happy to field questions from all county and transit authorities in Ohio.  Please e-mail or call Brian Mosier with questions (bmosier@cshco.com or 614-318-1460).

Amount Per Entity Chart

Counties are listed first, then Transit Authorities

Entity:Payment Amount:
Adams County $   2,338,462
Allen County $      499,518
Ashland County $      247,665
Ashtabula County $   1,953,705
Athens County $   1,361,470
Auglaize County $      164,879
Belmont County $      513,695
Brown County $   2,608,692
Butler County $   2,131,220
Carroll County $      222,196
Champaign County $      696,332
Clark County $   6,072,014
Clermont County $   1,385,155
Clinton County $      648,501
Columbiana County $   4,912,012
Coshocton County $   1,095,382
Crawford County $   1,747,652
Cuyahoga County $ 25,041,192
Darke County $      394,752
Defiance County $      142,872
Delaware County $      223,143
Erie County $      152,337
Fairfield County $      868,591
Fayette County $      392,342
Franklin County $ 14,101,763
Fulton County $      368,374
Gallia County $      950,776
Geauga County $      104,067
Greene County $      681,774
Guernsey County $      550,466
Hamilton County $   9,611,825
Hancock County $      116,906
Hardin County $      662,553
Harrison County $      122,629
Henry County $      216,876
Highland County $   1,802,649
Hocking County $      982,451
Holmes County $        35,327
Huron County $      781,761
Jackson County $   1,628,743
Jefferson County $   1,717,858
Knox County $      472,792
Lake County $      640,963
Lawrence County $   4,457,248
Licking County $   1,325,897
Logan County $      404,753
Lorain County $   2,425,083
Lucas County $ 12,058,600
Madison County $      534,899
Mahoning County $   5,235,592
Marion County $   1,688,310
Medina County $      240,830
Meigs County $   3,504,185
Mercer County $        70,711
Miami County $      426,061
Monroe County $      162,021
Montgomery County $   9,198,720
Morgan County $   1,165,475
Morrow County $   1,497,739
Muskingum County $   1,580,290
Noble County $      268,375
Ottawa County $      226,182
Paulding County $      651,361
Perry County $   3,014,204
Pickaway County $   2,027,117
Pike County $   2,030,999
Portage County $   1,168,359
Preble County $   1,050,742
Putnam County $      126,494
Richland County $      955,179
Ross County $   1,903,651
Sandusky County $      558,488
Scioto County $   6,331,880
Seneca County $      904,551
Shelby County $      201,342
Stark County $   1,471,853
Summit County $   2,309,202
Trumbull County $   3,958,878
Tuscarawas County $      353,741
Union County $      111,287
Van Wert County $      300,928
Vinton County $   2,803,310
Warren County $      317,939
Washington County $      521,996
Wayne County $      585,869
Williams County $      496,855
Wood County $      237,910
Wyandot County $      121,144
Greater Cleveland Regional Transit Authority $ 20,068,166
Central Ohio Regional Transit Authority $   5,273,867
Laketran Transit Authority $      160,420
Western Reserve Transit Authority $   1,055,799
Greater Dayton Regional Transit Authority $   4,605,453
Portage Area Regional Transit Authority $      234,905
Stark Area Regional Transit Authority $      735,589
Metro Regional Transit Authority $   2,315,641
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